What Did the Madoff Family Know in 2006?

When the Madoff story first broke, we noted that it “smelled funny” that Bernie was working alone.

Now, CBS News suggests that the Madoff family made estate moves which suggest they were anticipating property forfeiture.  (Video is here)

Excerpt:

CBS News has learned that Madoff and his brother, along with their wives, took steps two years ago — around the time that federal regulators started probing Madoff’s business activities — that could help prevent their Florida homes from being taken away from them, something possible under Florida state law.

“Florida has very unique laws and has been described by some as a debtor’s haven,” said John Pankauski, a Florida estate attorney. “People who may want to protect their property will seek the protection of Florida laws.”

Florida’s “homestead” laws, which are unlike what any other state has, in part allow homeowners facing legal judgments (or other financial issues) to protect their primary residence fully – keeping it out of the hands of potential creditors. One of the key steps in qualifying for the home-protection is seeking “homestead exemption,” which provides homeowners with a tax break.

On May 10, 2001, Peter Madoff bought the home at 200 Algoma Road in Palm Beach, Fla., along with his wife Marion. Both were listed as owners at the time. Five years later, on Nov. 8, 2006, Peter transferred the title to Marion making her the sole legal owner of the home. A month later, on Dec. 28, 2006, Marion applied for, and soon after received, homestead exemption.

According to federal documents, during this time the Securities and Exchange Commission was in the middle of what turned out to be a two year investigation into Madoff’s company, Bernard L. Madoff Investment Securities LLC, for “fraudulent activities.” The investigation began on Jan. 6, 2006.

“Why are you transferring assets to your spouse? What caused that transfer? If you are transferring assets for estate planning purposes why wasn’t it done before?” said Pankauski.

While its not conclusive, it certainly is somewhat suspicious in its timing . . .

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Source:
Double Trouble for Madoffs?
Armen Keteyian
CBS, January 30, 2009
http://www.cbsnews.com/stories/2009/01/30/cbsnews_investigates/main4765109.shtml?source=RSSattr=HOME_4765109

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